Observations focused on the problems of an underdeveloped country, Venezuela, with some serendipity about the world (orchids, techs, science, investments, politics) at large. A famous Venezuelan, Juan Pablo Perez Alfonzo, referred to oil as the devil's excrement. For countries, easy wealth appears indeed to be the sure path to failure. Venezuela might be a clear example of that.

Archive for March, 2009

And just to make a point as enfant terrible of international politics, President Hugo Chávez today invited Sudan’s President Omar al -Bachir to Venezuela as a way of showing his support for the Sudanese President. The International Criminal Court ordered the detention of al-Bashir, over the death of 300,000 people in Dafour. He had created more controversy recently expelling aid workers from his country.

With his statements, Chávez adds al-Bashir to his portfolio of support for criminals, such as Iraqi former President Saddam Hussein, Zimbabwe’s Robert Mugabe and terrorist Carlos The Jackal. Quite a portfolio for the Venezuelan President who broke realtionships with Israel over the recent conflict there with Hamas.

I guess he thinks he may follow in the path of such champions of human rights violations and wants to make sure there may be some support for him.

Yesterday, the New York Times carried an article about a study done by a Canadian Research Center, the Munk Centre, on a cyber espionage network originating in China which they dubbed GhostNet. The study was carried out for ten months and started by looking at cyber spying into Tibetan institutions. You can find the report, which came out today, here. It’s really fascinating.

What the researchers did was not only to study the fact that computers were being penetrated, but their investigation led them to uncover four web based control centers for generating the spying that were unsecured. These controls centers were used by GhostNet to attack and collect the information from the servers.The investigators even learned how to use these controls.

The researchers came up with evidence that at least 1,295 computers in 103 countries had been compromised, most of them in Asia and 30% of them in what they classified as “high value” including ministries of foreign affairs in many countries, as well as Embassies and other Governmental institutions.

GhostNet could take full control of computers, look for files and could even operate devices attached to the servers.

What was really intriguing, and at least two of the readers of this blog sent me emails noting it, was that when you looked at the graph accompanying the New York Times article, an inordinate number of attacked computers were in Venezuela:

Note how the largest density of computers is based in Asia, there are some in the US and Europe, but, for example, the number of affected computers in Venezuela is comparable to that of Europe, which certainly seems large.

In page 42 of the report, you can see that 8 CANTV computers were infected. Since half the traffic and most of the Government traffic goes through CANTV servers it is difficult to know what precisely was attacked.

The report stops short of saying that the Chinese Government is behind GhostNet, but given the insistent attacks on Tibetan computers and the high value both from a political and an economic stand point of some of the servers invaded, suggests that the Chinese Government is behind the spying. The report does say that this could have been a random attack of which a good fraction happened to be on sensitive servers, but this seems to be more of a political statement than anything.

But in either case, the number of Venezuelan computers seems inordinate both geographically and in the number attacked, given the relative importance of Venezuela in Chinese political, economic and military strategy.

Which leads us to ask: What was GhostNet looking for in Venezuela’s computers? Were they looking for oil information, given China’s interest in the country’s oil, or were they more interested in military or political matters?

If this attack had been based in the US, by tomorrow we would have the Dictator and his cohorts screaming bloody murder about the CIA, the empire and the devil. But given that it was their Chinese buddy-buddies, I will bet that when the Venezuelan Government learns about it, there will be little noise about it and to hell with the country’s sovereignty if it helps preserve a strategic relationship alive and in good terms.

While I thought that the Rosemont story would go away fast, the more that one learns, the more one realizes that this story has legs and will be around for quite a while. Finally the MSM realized that this was not simply that the DEA caught Mr. Vyasulu during a wire transfer via Rosemont to or from an account related to money laundering, but that the DEA set up a sting operation against him and as can be read in the indictment: “involving property represented by a law enforcement officer to be proceeds of specified unlawful activity…”. That is, a DEA agent presented himself to Mr. Vyasulu and told him the funds came from an illegal activity, drug trafficking and he agreed not to reveal the deatils which is obviously against the law. Since these sting operations are not set up at random, I have no doubt that there was a suspicion that justified this and the authorities simply wanted to have a clear cut case before they moved on it.

And while Mr. Vyasulu made the transfer via Rosemont, of which he is a principal, the only action so far has been against him personally and the freezing of Rosemont’s accounts. But I am sure, there will now be a long process of investigating all of the accounts and looking at all suspicious transfers that originated the sting operation. Whether the suspicions had or not something to do with Rosemont’s business in Venezuela is hard to tell, but we will know more in the next few days, as more announcements are made.

Because Rosemont was definitely acting as something more than a simple money or fund transmittal service which is oriented to small amounts and certainly does not usually have the elements of settling accounts between account holders and the like. Rosemont was being used both as a bank and as a settlement system at the simultaneuously and this is clearly not within the scope of Florida legislation for money transmittal. In fact, Florida legislation states that any funds received have to be transferred out within ten days of receipt, which means that Rosemont had to be very careful to have all account holders remove funds periodically to be in compliance with this. And this money transmittal business was intended by the legislator to be used for smaller amounts, as it required the funds to be held in deposit in sub-accounts at “FDIC protected” institutions. Since up to last summer this protection any extended to US$ 100,000, it is clear that this type of license was not meant to be used for moving the large amounts that have been reported.

But if the El Nacional reporter was able to spot the sting operation, the small headline in the front page is absolutely wrong: “Local dollar swap market continued suspended”. I don’t know where they got this information, but the market was functioning Friday. In fact the reporter could have checked either bonosvenezuela or Venezuelafx and noted that prices were changing and had changed during the day. Obviously the market was not as active, after all, 40% of the participants had funds in Rosemont, but prices were changing because someone must have been trading something. In fact, the same article quoted other news sources out of context, telling you how far the reporter went in getting the information.

And I am sure by Monday the market will be even more fluid.

And there is no doubt in my mind that this Rosemont Saga will not stop here and we will revisit the topic in the next few days.

First off the bat, I want to clarify that I did not raise the stir in the swap market with my post last night, the stir was coming anyway. All I wanted to do with that post was warn people that the swap market that everyone follows so closely was likely to be complex for a few days, due to the freezing of accounts in the US of a few dozen local brokers.

Obviously, I knew more than I posted, but that was not the objective of what I wrote, but it clearly became that, as I seemed to have the only published rational explanation as to why the swap market opened at Bid: Bs. 6 per US$, Ask Bs. 7 per US$ even if few transactions were being done at either end.

Some of that information is now public, so it is easier to write about it.

Essentially, banking will never be the same in the post 9/11 world, as the Patriots Act imposed very stringent conditions on money flows, particularly when there is a suspicion of money laundering, corruption or terrorism behind it.

The consequences for those that live or operate a business abroad, is that opening an account has become ever more difficult, as many institutions know that they will have a hard time checking you out and at the same time checking out where the money moving into your account is going or coming from.

As the swap market in Bolivars developed, many people set up new brokerage houses, which either because they don’t have capital, or a track record,or systems, or goodwill or whatever, were having a hard time finding a bank that would open an account for them, particularly for the swap business, where you have to know your client well, particularly with respect to money laundering or politically exposed persons in a country with the risks of Venezuela.

In the swap market, you swap (i.e. exchange) securities (bonds) in both Bolivars and US$ and in the end deliver either the securities or the money at either end. Each transaction requires the receipt of, for example, foreign currency to buy the bond at your account. If you do retail business (small individual clients), this could mean many transfers into and out of your accounts every day. Many banks simply don’t like that, particularly if they are all small, as the banks have no way of checking the source of the money. Other brokers work more at the institutional levels, with companies, where if you are careful, it is much easier to check that the proceeds come from legitimate business operations.

Since the exchange controls were implemented, the smaller brokers in the market have had accounts in various banks in the Caribbean, but since these are mostly frowned upon by the authorities, they are not the best solution.

Then, some time in the last couple of years, I am not sure of the time frame, but think it was last year, a company showed up, willing to provide these services. The name is Rosemont, aw Florida company with a wire transmittal license, and a friend was kind enough to send me their presentation when selling their services, which you can download here, as a Powerpoint presentation.

Essentially Rosemont provided these local brokers with sub-accounts, in Rosemont’s name at a US bank, to move the flows from the swap business when they sold the securities or received funds to buy them. Rosemont would even provide settlement services, if my understanding is correct, such that if brokers did business between them, they could net their accounts there.

Apparently, the DEA was tracking the activity of an account that made some transfers in or out of Rosemont (I have no idea in which direction). This had been going on for a while, but it was not until two days ago that an indictment came down, of all places in Massachusetts, against one of the principals of Rosemont. (Note that if you have a wire transmittal license, you are not supposed to keep cash in deposit on a regular basis, so I am surprised people thought this could work)

What the indictment charges is that one of the principals in Rosemont somehow collaborated with this money laundering, which amounted to US$ 900,000 in three tranfers.

When the indictments came down, all of Rosemonts accounts were frozen until the whole thing can be investigated. The result is that those brokers that had their accounts there can not move their funds and if they don’t have another account (with money!), they can not pay the bonds and/or trades agreed on.

Thus, today, nobody was willing to swap with anybody until you saw whether people delivered or not the bonds or the money for operations, not so much because you don’t trust your counterpart, but because you don’t know who they were trading with down the line.

So, as I expected the market opened with a huge spread and most people did very little. With time, the market will normalize, people will look more carefully who they work with from now on and life will go back to normal.

In the meantime, there were a lot of nervous people in Caracas today and the effect will be felt tomorrow, as swaps take two days to be completed.

I was a little surprised when Hugo Chavez began talking about his salary, saying he would b ashamed if it was too high like Bs. 10,000 per month (US$ 1,666 at the swap rate) and that the poor Deputies of the National Assembly made only Bs. 4,300 (US$ 716) per month. Surprised, because I had heard that high Venezuelan Government officials were making around Bs. 30,000 a month (US$ 5,000) at the swap rate, plus juicy bonuses and perks.

Then I thought I was really clever and I would get into the webpage of the Social Security administration and check the payments made into the system by Government officials, which would give me a glimpse into salaries.Essentially, you go to the IVSS webpage, input the ID number and birth date and it gives you all of the details of the account. How would I get the ID and birth date? Well, I could not think of a better way to use the Maisanta/Chavez database than this, using its convenient reverse function look up table, insert a last and first name and it gives you all I need.

Unfortunately, nothing is simple in Venzuela. It turns out that lwayers do not contribute to Social Security and nether do the military. So, forget about the Supreme Court, one of the places I was curious about.

I did find a couple of interesting things. First, I looked up Hugo the Dictator himself. Guess what? The data is fine, he did not contribute (as military) until he got elected President and then in 1999, he did:

Funny thing is he never contributed after that. Weird, no? He is not military, he contributed his first year as President and then, nothing…

In fact, Chavez lied today saying that he did not make enough money to pay taxes. If he makes Bs.10,000, he has to pay taxes and with much less social security taxes. Something smells funny here.

Maybe a reader can enlighten me.

The only other interesting fact I found, was when I checked the new Minister of Commerce, Eduardo Saman, the same one that yesterday was telling people you had to pay taxes and all of those glorious things, like sacrificing profits, that revolutionaries are saying, as if they had discovered warm water.

Well, the curious thing is, that Mr. Saman will turn 45 next week and either he was unemployed until 2001 or did not pay his social securty taxes, because he does not appear in the registry until 2001..

Fortunately others have begun doing the same job but with better access to information. While Chavze talked bout his salary or that of the National Assembly, El Nacional gave us a whole list:

Rafael Ramirez Bs. 60,000 a month

CNE Directors Bs. 25,000 to 35,000 a month

Central Bank President Bs. 42,000 a month

Supreme Court judges 40,000 a month, 5 to 8 months bonuses

Now, I have no objection to people in these positions making good money. What I object to is these lying bleeding hearts saying they care so much for the poor and then increasing their salaries to 50 times the minimum salary.

The Assembly approved now a Bill to put a cap on salaries. That Bill was introduced in 2007 but even though the Assembly did nothing last year as Chavez legislated by decree, the Bill never moved. Now that the Dictator wants it, it is rushed through the Assembly.

To me this Bill violates Venezuelan Labor laws. The Government can put a cap on salsries, but according to Venezuela’s Labor legislation you can not decrease anybody’s salary, the law is even more general than that, you can not “worsen” the working conditions of a salried worker. This applies to all of these positions. But I am sure they will genuflect and give thanks to Chavez for the privilege of working for him.

I am hearing that US authorities froze some accounts used by local brokers in the swap market in the US today and that at least three dozen brokers may be involved. The amount of money frozen may be in the hundred millions and clearly nobody knows how long the process may last.

What this means is that in the upcoming days, the swap market may become all tangled up, soaring one day, down the next or whatever, as many of these brokers appear to be some of those PDVSA sells foreign currency directly to. This means that a lot of the settlements in this market will not take place and there will be defaults all over the place, possibly creating a sort of domino effect.

As brokers default, the market is likely to become somewhat dysfunctional, as PDVSA will also have trouble supplying the market with foreign currency. Note that at the same time, PDVSA itself will be affected as some brokers may not receive their payment in Bolivars, when they do not deliver the foreign currency and thus PDVSA will not be paid either.

To me the idea of even throwing away a book seems extremely distasteful, let alone the pssibility of burning it or converting it into pulp. In the last month there have been reports in Venezuela of how the former Governor of Miranda State, now Minister of Infrastructure and Hosuing, Diosdado Cabello, sold library books to turn them into paper pulp and shut down libraries as the space was needed for other purposes. (El Nacional March 14th. 2009 page Caracas 3, El Nacional March 18th. 2009, page Caracas 3, El Nacional March 21, 2009, page Caracas 3 2009))

This ideological cleansing was performed with some planning, eliminating for example, texts that had to do with the “Empire” (i.e. The U.S. of A.). Then this intellectual promoter of the revolution gives one such example (I am not making this up!):

“For example, children’s books which have snow in them“

Jeez, while it is true that snow may not be part of the everyday life of Venezuelans, it not only exists in the country, but you can play with it and even make snowmen and make sexy snow women, riding a motorcycle, as demonstrated in this picture taken in Merida, Venezuela:

Because let’s try to understand this a little better. Snow is a type of precipitation, which occurs whenever certain atmospheric conditions are present. It is not exclusive to the US, they see it in Russia, China and North Korea, to name a few. Thus, the principle seems to be here to remove anything that comes from nature, which at the same time is not part of the daily reality or perception of Venezuelan kids, giving priority to those “revolutionary” concepts that are. And clearly, its national origin its not critical, as in the case of snow.

It would then seem to me, that there are many other items that should be banned then, that qualify even better than snow, given that at least some fraction of the country’s can see, touch and play with snow. (Even if the distinguished revolutionary librarian of Miranda State is not)

Let’s take electrons for example. This subatomic particle is as foreign as can be to a Venezuelan. It has charge and mass, but because of the Heisenberg Uncertainty Principle, you can’t see it. You can only infer that it exists. Even worse, this ideologically incorrect particle was first detected by a British scientist by the name of Thomson and its charge measured by, imagine that, an American by the name of Millikan.

Thus, I see no reason, why the electron should be present in any Venezuelan library. If snow is banned, electrons should have been banned long ago! After all, the number of Venezuelan who can say they have performed the necessary steps to believe that an electron exists, is much smaller than those that have seen snow, here or abroad. (I have inferred electrons in my lifetime both here and abroad, but I am a privileged oligarch, I guess)

Then, we could ban anther pernicious non-revolutionary concept, which is clearly not ideologically pure, but obviously superfluous: World Geography. And the esteemed leader of the Miranda State Library system is the best proof of this. If she had not wasted so much time learning where the Empire is located, she could have learned more of our own geography and know that there is snow in the Venezuelan Andes.(Or there are Andes, for that matter) She could have a stronger national identity, more ideologically pure, without having to learn all of the foreign places and locations, that she should not even be interested in visiting or knowing. No?

Then, we should ban strange animals and book with weird animals, which Venezuelans are as likely to ever see, as an electron. Take the Aardvark, for example, I don’t even know if in Spanish the name is the same. Or the Komodo Dragon, because once Geography is banned, Indonesia would also be out of the books, so it would make little sense to talk about that dragon.

And then, of course, let’s ban all books and films that mention penguins! If you don’t know about snow, why would you care about this silly imperialistic animal, that invades us via their March that the average Venezuelan, whether adult or kid, should not care about. Let alone happy feet, a movie abut this animal which is in a state of constant happiness and exhilaration, something which is simply not part of the revolution or revolutionary. Just look at Chavez! Diosdado! Jesse! Jorge! Jose Vicente! Tibisay! Any of the leaders! Mostly gloomy, all the time. And to top it all off, the stupid penguin lives and sleeps in snow! Which we already banned.

I could go on, but you get the picture. There is a lot of work to be done, we have to start committees, communal organizations, create an open software database, have the National Assembly investigate. So many other things to be banned in order to make the revolution and the country ideologically pure.

Exchange controls have always been a source of corruption. Every time the Venezuelan Government has implemented exchange controls, it has eventually become an opportunity for graft and corruption.

This time has been no different, but actually much worse and in magnitudes never seen before in Venezuela’s history. Much worse, because in the previous exchange control regimes, corruption was limited to the office that approved requests for foreign currency and there were checks and balances that would limit the graft. But more importantly, this has been worse, because the Government has been intervening in the parallel market in an extremely non-transparent fashion, creating not only an additional source of corruption, but one that goes completely unchecked.

In the end, because the exchange control office CADIVI is controlled by military and there are no checks and balances, little is known about how big corruption may be in that office. We all know that there are people that will ease your requests for a fee, and that the payment of private debt has been a source of very juicy profits, as local companies have purchased their debts at a huge discount, only to pay it with official dollars at 100% of their face value. But there is no way of estimating the magnitude of these rackets.

In contrast, this blog and newspapers like Tal Cual, have followed closely what developed in the parallel swap market and it has allowed us to establish the multi-billion nature of the racket. Unfortunately, those denouncing this have been few and far between and as I noted in another blog, politicians have failed to talk about this, which makes you wonder about their commitment to fight corruption.

There have been essentially three stages to this, below I summarize them, concentrating on the first and last one:

Act I: The Merentes Era and Argentinean bonds: At some point during Minister’s Merentes last tenure in the Ministry of Finance, Hugo Chavez came up with the idea of helping out Argentina by purchasing that country’s debt. The debt was purchased and soon afterwards, the Minister of Finance, a Mathematician with no finance experience, started gloating that the country was making a nice profit in these transactions.

Everyone was a little surprised that they could get rid of them so fast and at a profit, except the Government was not selling the debt in the international markets. Instead, it was selling it to local brokers at a price higher than the purchase price, but for Bolivars at the official rate of exchange. These brokers would sell them in the international markets at a lower price, but they would get dollars which they could sell in the parallel market and get more Bolivars than they paid for.

Made up example:

Government buys bond for 80 cents on the dollar. That is, it pays 800,000 dollars for a million dollars of the bond. It sells the bond for full value, that is, for one million dollars but at the official rate of exchange. The Government “made” money, because in theory it only recognizes the official rate and it only paid 800,000 dollars, which it values at Bs. 2.15 per dollar, but then it sold it for one million dollars but at the Bs. equivalent to 2.15 million Bolivars. Instant profit.

Let’s look at what the broker does. He buys one million dollars of bonds at Bs. 2.15, or Bs. 2.15 million, it sells the bond and receives only 800,000 dollars in the international markets, but those dollars can be sold in teh parallel market at say Bs. 3 per dollar. Voila! they get Bs. 2.4 million or a profit of 250,000 Bolivars. A 16% plus profit, without doing anything!

Of course, it was more complicated than that, as those “lucky” enough to get the bonds had to pay a 60% (average estimate) kickback on the difference to a bunch of “intermediaries”.

More or less at the same time, Fonden also began buying “structured notes”, which are essentially a security issued by a foreign bank in US$ with certain conditions or instruments under it.

These notes were also sold into the parallel swap market, which conditions like those of the Argentinean bonds, commissions, artificial profits and all of that. Except that more money was made with these, because there were also fees paid to structure the notes and to dissolve them.

I can’t remember the break down of how much was sold under Merentes, but as you will see, the numbers are simply huge.

Act II: Cabezas replaces Merentes: Once Cabezas replaced Merentes, the Government stopped intervening the swap market, supposedly because Cabezas disagreed with it. In the absence of the Government supplying foreign currency to the parallel swap market, the rate soared.

I was actually impressed at the time that Cabezas would stop the corruption associated with the selling of the bonds and structured notes, but as the rate soared, the sales of the notes began again. I guess the realities of the market were stronger than Cabezas’ qualms or ethics and there was periodic intervention of the swap market that managed to slow down the rate of increase of the parallel rate.

Act III. The Isea semester: When Minister Rafael Isea accepted the position, everyone was puzzled. he was Chavez’ choice for Governor of Aragua State in the November election, which implied he had to resign by August. Why become Minister of Finance for only a few months?

Soon after Isea became Minister, the Government, via the development fund Fonden (The one supposed to develop infrastructure and back social programs) began an irresponsible and and massive campaign to lower the parallel swap rate. While some hailed the action, it was a waste of time and money, as they lowered the swap rate from Bs. 6 per dollars to Bs. 3.2. But it was clearly unsustainable and the question was whether Isea wanted to lower the swap rate or this was a way of raising money for his campaign.

In the end, between Acts I and III, the Government sold close to US$ 7 billion in Argentinean bonds and some US$ 8 billion in structured notes, that’s US$ 15 billion, while I know that commissions ran close to 15% for both sides, assume only 10% and you can see that between the “intermediaries” and the brokers, they made a nice piece of change of US$ 1.5 billion.

Just like that, in the open and everyone knowing about it. Including Chavez. Even the names of the intermediaries were out in the open. Ultimas Noticias published them.

Act IV: Ali Rodriguez to Finance, crooks move to PDVSA: Then last June, Ali Rodriguez move to the Ministry of Finance. Interventions suddenly ceased in the market and the swap rate began rising. Clearly, Rodriguez stopped the racket. This means there is some semblance of honesty in him, as he clearly said: not through my Ministry. Problem is, I am sure he knows that the crooks moved to PDVSA.

And in this new and novel phase, PDVSA has been intervening, not with bonds, or notes, just plain, pure simple cash. We can guess as to whether PDVSA intervenes with US$ 100 or 200 million per week, but we can’t monitor any parameters. We don’t know how much the brokers are ebing sold the dollars for, how much they pay, how much they split. We can hear rumors that last Friday PDVSA sold US$ 100 million, or that it is all flowing through an account in Bank of America. But there is so little transparency, that this is in the end the most obscure of all the acts. What economist Orlando Ochoa called yesterday in La Razon: “The Venezuelan economy has fallen into hands of the lack of scruples and immorality”

And Ochoa is right. Because as he says, the official rate is at Bs. 2.15, the swap rate is near Bs. 6 per US$ and PDVSA is selling its cash, in whatever form, using various mechanisms and intermediaries to supply the swap market with dollars at the parallel swap rate.

Which leads you to ask: Does PDVSA receive the lower rate and the difference is simply split among the players? Or is it in between?

What is clear is that there is a 200% arbitrage between the two and in the words of Ochoa:

“This is an open invitation to corruption…how does the Government register these transactions, since it only recognizes the Bs. 2.15 rate? …This is unacceptable”

The problem is that Ochoa dares to say what few do. You don’t read about this in El Nacional or El Universal. You don’t even see it in Globovision, let alone Venevision and obviously not in the Government’s TV stations. You don’t see opposition politicians talking about it either. Why? I have no clue. But fear is my first suspect. Complicity is the second. Maybe we can also have a 60/40 split on that.

Only Petkoff in Tal Cual, Ultimas Noticias a couple of times and Ochoa, and a couple of more economists and some blogs like this one (We were the first ones to talk about the Argentinean bond racket) dare to give details.

And in the meantime, the biggest corruption racket in the western world continues day after day in poor Venezuela, under the cooperative and indolent eyes of the autocrat turned Dictator. We are talking a few billions of dollars. It is said easily: A few billion dollars in commissions stolen from the Venezuelan people under the eyes of the robolution and its leader Hugo Chavez.

Imagine what this could for health, infrastructure, nutrition, housing or whatever. But this criminal corruption is backed by Chavez and his cohorts only because it is part of his control mechanism. The one that he thinks (and it may) allow him to remain in power forever. Those that fed from the cesspool of the corruption of the robolution, will defend the process to death. They would be nothing without it.

I can’t help but marvel at Hugo Chavez’s ability never to take responsibility for anything. It is the same attitude of a little kid, which in Spanish is best represented by saying “Yo no fui” (I didn’t do it!).

He gets away with this time after time. Ten years in Government screwing things up and he still comes out and blames everyone but himself. And unfortunately, a lot of people believe him.

Yesterday was emblematic of this attitude by the Venezuelan President. Take the salaries of high ranking officials. Since the exchange rate crisis of 1982, never did the salaries of high ranking officials rise as fast and in such a grotesque fashion than under Chavez. When Chavez became President, a university Full Professor was making maybe Bs. 3 million or US$ 3,000 at the official rate of exchange, this was the same salary as a Minister or a Deputy of the National Assembly. Today tat same Professor makes maybe Bs. 7,000 (US$ 1,100 at the swap rate, the only one he has access to) while the Deputy makes about Bs. 14,000 plus bonuses, diets, travel and perks. And let’s not talk about Supreme Court Judges, CNE Directors or President’s of the myriad of Central Government institutions Chavze has created.

And who allowed this to happen? Hugo Chavez. But you would have thought it was some othe perverse Government who did it. Becasue in the end Chavez has needed this outrageous salaries to keep the Captains happy. And it was the juicy bonuses and pensions of the Supreme Court and Central bank, that made them so attractive to the Chavistas “light” willing to trade a university pension for a cushy position with would readjust their pension a factor of five at the end of the road. Human rights and justice be damned, go for the money!

And who did this? “Yo no fui!” President Hugo Chavez. He has never tried to stop it (Don’t think he will this time around either)

And all his talk last night about austerity and eliminating superfluous expenses also reminded me that but not devaluating, I will be able to go to fly to Europe at Bs. 2.15 per US$, really no sacrifice for me. (Why go to the Empire, if it’s so cheap to go to Europe or Asia?)Not only that, but I will get a 400 euro cash advance and US$ 2,500 per dollar for my expenses. But Hugo was not about to remove this privilege, fearing the middle class would get mad at him. I wonder why, since he has so little support in that part of the population.

And who set up this system? Ummm…funny if it wasn’t Hugo Chavez himself who created all of these rules and has maintained this subsidy for the rich, which is extremely superfluous.

But Chavez would say: “Yo no fui!”

And as the ports are taken over, look at prior efforts to “take over” things for the national good. The Macuto Sheraton? Empty and abandoned. The Melia Caribe? Abandoned. The Cable Car? It’s deteriorating. Venepal? Dying. Veneiran? You got to be kidding me to ask. PDVSA? A joke, it has twice the number of workers produces less and its debt its huge.

And Chavez would say, “Yo no fui!” We know better, but do others?

And of course, 20,000 traitors were fired from PDVSA in 2003 because we had to preserve national “sovereignty”, but Ramirez is right now going aroudn the world trying to get US$ 4 or 5 billion in exchange for futre oil production, while Chavze got an additional US$ 4 billion advance from the Chinese for his China Fund, which is exactly the same, money received so that Venezuela will later send oil to the Asian country. Pan para hoy, hambre para mañana. (Bread today, hungry tomorrow)

And Chavez is certainly to say: “Yo no fui!”

Because the Showman/Dictator has to be given credit for his ability to lie and deceive. Funny that he remembered the criticism by Nobel Prize winner in Economic Joseph Stiglitz to the policies of Barak Obama, but he failed to recall that Stiglitz also said Venezuela is among the countries that will do worse because of the crisis.

And while Chavez talks about efficiency, savings and not devaluating because we don’t need it, the truth is that every week PDVSA changes foreign currency in a ver non-transparent way, allowing some PDVSA officials and some local brokers to make a mint in the process, arbitraging the Venezuelan currency. Sure, thsi is being done without Chavez knowing…

And Chavez would say: “I didn’t do it”

And in the end he may get away with it. He has for ten years after all. He gives away the money, he gives away the oil, he gets rid of Venezuela’s oil research complex, he destroys private companies, wipes out farms, allows wholesale corruption, denies basic rights, inflation our of control, controls the system of justice.

Despite reassurances that everyone who wants to travel abroad in Cuba can do it, blogger Yoani Sanchez was denied the possibility of traveling. As Sanchez points out, she has never been found guilty of anything or even charged with anything.

Maybe some of our PSF friends can enligthen us on this matter. How would they feel if they could not travel away from their countries? This is where PSF’s become ostriches or in their putrid brain justify the action as “national security” or some stupid justification like that.

Will they cheer when Chavez starts doing the same? Guess what? he already did for a while when after the 2004 recall referendum, we were denied passports because we went against the Dictator.

But we know, these policies are “necessary” here for the common good and unnecessary in your own very civilized countries.

So dear friendly PSF, don’t come telling me about democracy and rights either here or in Cuba, please.